JPMorgan cuts NIO stock rating, slashes price target to $4.70

On Tuesday, JPMorgan analysts downgraded NIO Inc . (NYSE:NIO) stock from Overweight to Neutral and reduced the price target to $4.70, a significant decrease from the previous target of $7.00. Currently trading at $4.28 with a market capitalization of $9 billion, NIO’s stock has experienced significant volatility, as highlighted by InvestingPro data. The revision reflects a more conservative outlook on the company’s future revenue and earnings potential.

The analysts at JPMorgan adjusted their forecasts for the electric vehicle manufacturer’s financial performance, citing a need for earnings delivery to play a crucial role in NIO’s stock performance for the year 2025. This comes as NIO struggles with profitability, reporting a net loss of $3 billion in the last twelve months and maintaining weak gross profit margins of 8.65%. As a result, they have lowered their revenue and earnings estimates for fiscal years 2025 and 2026 by 7-10% and 13% respectively, aligning their new projections with current street forecasts.

Despite the downgrade, JPMorgan’s analysts anticipate growth in NIO’s vehicle sales, projecting a 50% increase to 334,000 units in the current year, up from the 2024 figures. However, this estimate falls short of the management’s ambitious target of doubling 2024’s sales to approximately 440,000 units by 2025.

The firm emphasized the importance of monitoring NIO’s monthly sales and order flow to gain a clearer understanding of the company’s trajectory. The analysts’ current stance on NIO stock is to hold, as they wait to see whether the company can meet its sales objectives and strengthen its financial results.

In other recent news, NIO Inc. has garnered attention from various analysts. Citi maintains a Buy rating, highlighting robust 2025 sales targets and infrastructure expansion, including plans to reach breakeven by 2026. NIO’s sales targets include a year-over-year increase of 10-20% for the NIO brand in 2025, with the Onvo brand’s L60 model projected to hit 20,000 units by March 2025.

Conversely, Goldman Sachs downgraded NIO’s stock from Neutral to Sell, reflecting concerns over the company’s short-term prospects due to a limited new model pipeline and slow production ramp-up for Onvo.

Meanwhile, BofA Securities reiterated a Neutral stance, spotlighting the planned rollout of the ET9 model and Firefly brand. NIO’s self-developed autonomous driving chip, the Shenji NX9031, is expected to reduce costs and enhance gross profit margin by approximately 3%.

Barclays (LON:BARC) maintained an underweight rating on NIO, observing the company’s efforts to launch new vehicles under the ONVO and Firefly brands and expand ONVO’s production capacity. However, they expressed caution over the company’s optimistic forecast for unit sales and gross margins for 2025.

Finally, Bernstein SocGen Group reduced NIO’s price target by 10%, noting Q4 headwinds and ONVO’s performance. Despite a rise in vehicle sales volume, NIO’s average selling price saw a decline due to a weaker product mix and increased promotional activity.

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